The price of traditional South African barbecue rose modestly in January after falling sharply in the previous month, with struggling consumers hoping food price increases could continue to ease. The central bank's prediction that this would happen has been confirmed.
The average price increase for backyard barbecues this month was an annualized 6.2%, the same as December, but significantly lower than the 10% recorded in November, according to Bloomberg's Shisanyama Index. By comparison, food prices rose 8.5% year-on-year in December, as measured by Statistics South Africa. The central bank expects food inflation to average 5.7% this year.
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Samples made from onions, cooking oil, and dried corn grains were the biggest contributors to the index remaining stable while easing.
The gauge processes data from the Pietermaritzburg Economic Justice and Dignity Group to track the prices of 14 main ingredients of barbecue (locally known as braai) consumed in South Africa's residential areas.
To compile the survey, PMBEJD data collectors surveyed 47 supermarkets and 32 meatpackers targeting low-income markets in the wider region of Johannesburg, Durban, Cape Town, Pietermaritzburg and the northwestern town of Springbok. It tracks the price of food on store shelves.
Rising food prices have become a major driver of overall inflation, contributing to the central bank's Monetary Policy Committee keeping interest rates at 8.25%, the highest in 2009, since July.
Speaking after the MPC meeting on January 25, Governor Lesetya Kganyago said inflation had eased in the second half of 2023, but was on a downward trend to the midpoint of the Reserve Bank's target range of 3% to 6%, which it hopes will anchor expectations. He said there needs to be.
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“There are no significant trends indicating that inflation is moving back towards target,” he said. “Don't expect a policy readjustment unless inflation falls sustainably towards the target and, more importantly, as long as inflation remains sustained.”
Higher-than-expected rainfall in South Africa late last year and this month could mean El Niño weather conditions have averted an expected drought, which could help curb food inflation. be.
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